Bankruptcy is a legal process recognized in the U.S. Constitution for the protection of individuals and businesses who are unable to pay their debts and face financial ruin if they don’t get help. Unfortunately, there are a lot of myths and misunderstandings surrounding the bankruptcy process. Below are answers to just a few of the questions we frequently encounter at the Law Offices of Stephen Orchard as we help people in Boca Raton, West Palm and Broward County seek the protection of Chapter 7 or Chapter 13 bankruptcy.

We hope the following helps to answer some of your basic questions. If you have other questions, or if you need to talk to an attorney about possibly filing for bankruptcy in Florida, call the Law Offices of Stephen Orchard at 561-455-7961 for a free consultation with attorney Stephen Orchard.

Q. How long does a bankruptcy show up on my credit report?

A. By law, a Chapter 7 bankruptcy will be on your credit report for ten years, and a Chapter 13 bankruptcy will be on your credit report for seven years. These bankruptcies cannot be removed early, despite what so-called “credit repair” companies may tell you.

Don’t think that just because a bankruptcy is on your credit report that you can’t get credit. You may have to pay a higher interest rate than you would like, but credit is available. In fact, people in bankruptcy or just emerging from bankruptcy can sometimes be flooded with offers of new credit. With careful planning and thoughtful spending, you can begin rebuilding your credit immediately after a bankruptcy.

Q. How do I know if I am eligible for Chapter 7?

A. If your household income is below the Florida median income level for your size of household, then you should be eligible to file Chapter 7. If your income is above the state median, you will need to take a means test, which is a formula that evaluates all of your income and expenses to determine whether you have too much monthly disposable income to qualify for Chapter 7. We can help you determine your Chapter 7 eligibility and discuss your options with you.

Q. I went through bankruptcy a few years ago, and now it looks like I may need to file again. Is that allowed?

A. Yes, but there are limits. For instance, if you previously had a Chapter 13, you cannot file another Chapter 13 for two years from the completion of the plan, and you cannot file a Chapter 7 for four years. If you previously received a Chapter 7 discharge, you cannot file another Chapter 7 for eight years, or a Chapter 13 for four years from the date of the earlier discharge.

If you previously filed but had your case dismissed, you can re-file, although you may have to wait up to 180 days, depending upon the reason the case was dismissed.

Q. Can I use bankruptcy to get rid of a tax debt?

A. For the most part no, although you can have a federal income tax debt discharged if the debt relates to a filing deadline that is more than years old and you filed your return more than two years ago. Also, the tax assessment must be at least 240 days old, and there cannot be any evidence of fraud or tax evasion related to the non-payment.

Even if your tax debt is nondischargeable, filing for bankruptcy may put you in a position where you can afford to pay off that tax debt and avoid the civil and criminal penalties you could otherwise face.

Q. Is there any way to stop my creditors from constantly calling me at all hours of the day and night? They even call me at work just to embarrass me.

A. Professional bill collectors must abide by the Fair Debt Collection Practices Act (FDCPA), which limits when they can call and where. Talk to an attorney if you are being harassed, because the law allows you to sue for violations of the FDCPA. Another way to stop creditor harassment is by filing for bankruptcy, which implements an automatic stay on all collection efforts. Bill collectors and creditors must get permission from the court before they can try to collect a debt from someone who is in bankruptcy. Finally, if you want your creditors to stop bothering you, let them know you are represented by an attorney and give them your attorney’s number; they should then deal directly with your lawyer and leave you alone.

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Stephen Orchard is the founder and principal attorney at the Law Offices of Stephen Orchard in Boca Raton, serving clients from West Palm Beach to Broward County in the areas of bankruptcy and real estate law.

Stephen Orchard has handled both the sale and purchase of homes for my husband and I. In both matters Stephen made sure that every aspect went smoothly, and kept us well informed. His knowledge of the law and his experience was invaluable to us. We would highly recommend Stephen Orchard to anyone looking for exemplary legal services...

Ann

Stephen Orchard has handled both the sale and purchase of homes for my husband and I. In both matters Stephen made sure that every aspect went smoothly, and kept us well informed. His knowledge of the law and his experience was invaluable to us. We would highly recommend Stephen Orchard to anyone looking for exemplary legal services...

Ann

Stephen Orchard has handled both the sale and purchase of homes for my husband and I. In both matters Stephen made sure that every aspect went smoothly, and kept us well informed. His knowledge of the law and his experience was invaluable to us. We would highly recommend Stephen Orchard to anyone looking for exemplary legal services...

Ann

Stephen Orchard has handled both the sale and purchase of homes for my husband and I. In both matters Stephen made sure that every aspect went smoothly, and kept us well informed. His knowledge of the law and his experience was invaluable to us. We would highly recommend Stephen Orchard to anyone looking for exemplary legal services...